81-6-1 Public Meeting to Consider Suggested Control 001 Measure for the Control of Hydrogen Sulfide Emissions from Geothermal Operations at the Geysers Known Geothermal Resources Area.

81-6-2 Public Hearing to Consider Amendment of Title 13, 137 California Administrative Code, Chapter 3, Subchapter 5 to Add a Regulation Limiting the Sulfur Content of Diesel Fuel for Use in Motor Vehicles in California.

Suggested Control Measure for the Control of Hydrogen SulfideEmissions from Geothermal Operations at the Geysers KnownGeothermal Resources Area.

SUMMARY AND STATEMENT OF REASONS

The Geysers area in Sonoma, Lake, Napa, and Mendocino Countiescontains the world's largest development of geothermal energy toproduce electricity. The area is referred to as the GeysersKnown Geothermal Resources Area (Geysers). Electricity isproduced from "dry steam" extracted from the upper portion of thearea's geothermal reservoir. Currently, about 950 Megawatts(MWe) of electricity are generated from power plants located inthe Geysers, and the California Energy Commission estimates thatthe total potential of the Geysers could be as large as 2700 MWe.

The electric power generated from geothermal resources does notresult in the same air polluting emissions as would be emittedfrom an equivalent sized fossil-fuel fired power plant. In theGeysers the pollutant of primary concern is hydrogen sulfide(H2S).

On April 27, 1978, the staff presented the Board with a modelcontrol strategy for controlling hydrogen sulfide emissions fromgeothermal facilities at the Geysers. The control strategyproposed H2S emissions limitations for new and existinggeothermal power plants and for stacking (emissions associatedwith the venting of steam). At the conclusion of the meeting,the Board delegated to the Executive Officer authority to modifythe control strategy as necessary and work with the Lake andNorthern Sonoma County Air Pollution Control Districts inadopting the control strategy. The regulations adopted by thetwo districts require a case-by-case analysis for each new powerplant application.

The present air quality permitting process governing geothermalpower plants and the associated wells and steam transmissionlines is in need of streamlining, and contains elements ofuncertainty. New Source review rules currently applicable at theGeysers require an air quality analysis which generally consistsof air quality simulation modeling, tracer tests, or acombination of both. The lack of comprehensive ambient airquality data since 1978 has resulted in disagreement over theeffects on air quality of individual facilities and on whetherthe ambient air quality in the Geysers area is improving. Thenumber of monitoring stations in the Geysers has decreased from 8to 2 since 1978, and only one has operated continuously since1978.

Given these unique circumstances at the Geysers, the staff isproposing a control measure designed to attain and maintain thestate ambient air quality standard for hydrogen sulfide and yeteliminate the need for ambient air quality analyses for newgeothermal power plants on a case-by-case basis. The controlmeasure includes hydrogen sulfide emissions limitationsapplicable to new and existing power plants, and during stackingconditions (steam venting during power plant outages). Thereduction in emissions realized from existing units will providethe growth increment necessary for new units, eliminating anyneed for case-by-case modeling analyses. Control technologycurrently exists which can achieve a high degree of control ofH2S emissions from new power plants.

The control measure presented in this report eliminates the needfor performing an air quality analysis on a case-by-case basisand would eliminate the uncertainties surrounding such analysis. An applicant would be provided the certainty of knowing inadvance the emissions limitations required for obtaining a permitor positive determination of compliance from the district. Inshort, by complying with these technology-based requirements, airquality can be eliminated as an issue in the siting of geothermalpower plants. Adoption of this suggested control measure willexpedite the permitting of new power plants in the Geysers areaand substantially reduce the costs and time associated withobtaining permits.

Based on an analysis of information currently available, andextensive discussion with district officials and industryrepresentatives, the staff has reached the following conclusions:

A. The state ambient air quality standard for hydrogen sulfide has been exceeded on numerous occasions at the Geysers. older, less efficient geothermal power plants and associated operations have been largely responsible for these violations. Further development of the Geysers as a geothermal energy source will depend not only on siting clean, new power plants but on the reduction of H2S emissions from existing geothermal operations.

B. Recent air quality data which may indicate some slight trend toward improvement in air quality due to partial control of existing power plants are incomplete and inconclusive. Since 1978, ambient H2S monitoring at the Geysers has been sparse. An air quality monitoring network should be re-established at the Geysers.

C. The present air quality permitting process governing geothermal power plants at the Geysers is cumbersome, time consuming, and contains a great deal of uncertainty. The process requires an air quality analysis for each new power plant application that consists of air quality simulation modeling, tracer tests, or a combination of both. Such analyses require assumptions that are subject to a great deal of controversy.

D. Hydrogen sulfide emissions controls are available or are expected to be available in the near future to reduce significantly emissions from existing, uncontrolled, and intermittently controlled units.

E. Technology is currently available to control H2S emissions from new power plants to a very high degree, and other alternative technologies are being developed to achieve the same high degree of control.

F. The siting of geothermal power plants and related facilities can be expedited by removing the uncertainties associated with the current permit process. This can be accomplished by:

1. Establishing a technology-based H2S emission limitation for new power plants, existing power plants, and stacking that provides for attainment and maintenance of the ambient air quality standard for hydrogen sulfide; and,

2. Exempting emissions of H2S from new power plants from the requirements of certain portions of the new source review rules of Northern Sonoma County, Lake County, and Mendocino County Air Pollution Control Districts.

The staff recommends the Board take the following actions:

A. Approve the suggested control measure in Appendix A and request the Northern Sonoma County, Lake County, and Mendocino County Appendix A and request the Northern Sonoma County, Lake County, and Mendocino County Air Pollution Control Districts to consider adopting the measure within 60 days after approval by the Board; and

B. Direct the staff to work with the appropriate air pollution control district to re-establish an ambient air quality monitoring network for the Geysers.

ITEM NO.: 81-6-2

Public Hearing to Consider Amendment of Title 13, CaliforniaAdministrative Code, Chapter 3, Subchapter 5 to Add a RegulationLimiting the Sulfur Content of Diesel fuel for Use in MotorVehicles in California.

SUMMARY AND STATEMENT OF REASONS FOR PROPOSED RULEMAKING

The national and state standards for particulate matter and thestate standard for visibility have been consistently violatedthroughout the state over the past years. In addition, the statestandards for sulfur dioxide (SO2) and sulfates have beenviolated in the South Coast Air Basin (SCAB) and Kern County. The emissions of oxides of sulfur due to the combustion of fuelscontribute substantially to these violations.

In the South Coast Air Basin, about 30 percent of emissions ofsulfur dioxide come from power plants, about 20 percent frompetroleum refining, and about 25 percent from the use of dieselfuels in stationary and mobile sources. Emissions of sulfurcompounds from the combustion of diesel fuel in motor vehiclesare expected to increase significantly over the next ten yearsbecause of the anticipated rapid penetration of diesel poweredvehicles into the new vehicle sales market and the decreasingavailability of low sulfur crude oils. Board staff estimatesthat by 1990, emissions of sulfur oxides from diesel poweredmotor vehicles will be approximately 78 tons per day in the SCABand 216 tons per day statewide.

Fuel oil burned by power plants and refineries in the South CoastAir Basin is limited in sulfur content to 0.25 percent and fueloil burned by other sources is limited to 0.5 percent by weight. Emissions from coke calciners, sulfur recovery plants, sulfuricacid plants and the regenerators of fluid catalytic crackingunits are also controlled. Currently, American Society forTesting Materials (ASTM) Standard D 975 specifies a limit of 0.5percent sulfur by weight. That limit was set for the primarypurpose of preventing engine corrosion. The current Californiaregulation for unleaded gasoline is 0.04 percent sulfur byweight, and will become 0.03 percent sulfur by weight on January1, 1982. However, a similar standard for diesel fuel does notexist.

The staff proposes for the Board's consideration a regulation tolimit to 0.05 percent sulfur by weight diesel fuel manufacturedafter January 1, 1985, to be sold, offered for sale, or deliveredfor sale at retail in California for use in a motor vehicle asdefined by the State of California Vehicle Code. The staffestimates that the proposed regulation will reduce emissions ofsulfur compounds from diesel powered motor vehicles by greaterthan 80 percent.

By 1990, these reductions in the emissions of sulfur compoundswill produce, according to staff estimates, a 20 percentreduction in ambient levels of sulfur dioxide and sulfateparticulate matter and a 75 percent decrease in the number ofexceedances of the state ambient air quality standard for sulfurdioxide in the South Coast Air Basin. In addition, theregulations will improve visibility in the Basin by, typically,about 15 percent and reduce the acidity of rainfall in thesurrounding area.

The present limits on the sulfur content of fuels are commonlyachieved by refining low sulfur crude oil, particularlyIndonesian crude oil. The decreasing availability of low sulfurcrude oils, and the increasing production of high sulfurCalifornia heavy crude oils will make it more difficult to complywith regulations limiting the sulfur content of fuels, unlessrefiners install equipment to take sulfur out of the fuel.

To determine the added investment which California refiners wouldhave to make to produce low sulfur diesel fuel, the staff hasdrawn upon the results of the 1985 California Oil Scenario Studyreport prepared by Bonner and Moore Associates, Inc. That studywas completed in March 1980 and is helpful in determining thetechnological feasibility and economic reasonableness of controlswhich would reduce the sulfur content of diesel fuel. Inaddition, the staff has conducted surveys of the petroleumindustry to determine the cost effectiveness of desulfurizingvehicular diesel fuel and has held several workshops withindustry representatives. The staff estimates that the cost ofmeeting the proposed regulation will vary from about 0.51 to 1.34dollars per pound of SO2 reduced with lower cost applicable tolarge refiners and the higher cost applicable to smallerrefineries. The after tax cost per gallon of diesel producedwould vary from about 1.5 to 6.4 cents per gallon, with theproduction weighted average cost being 3.1 cents per gallon.

Air quality improvements that will follow implementation of theregulation are expected to extend the lives of between 285 and889 residents of the South Coast Air Basin in 1985; between 414and 1378 lives will be extended in the South Coast Air Basin in1990. The benefits of the regulation increase each year becauseincreased diesel fuel use would otherwise lead to increases inambient sulfur oxide levels each year. In 1985, the economicbenefits of the regulation from reduced health and materialsdamage are estimated to exceed the costs of the rule by severalfold.

The staff report contains a detailed discussion of the need forcontrol of the sulfur content of diesel fuel, the proposedregulation, the control technology, the benefits, and theeconomic and environmental impacts of the proposed regulation, aswell as a list of references used in preparing the report.